The Canadian dollar reached its strongest level against the U.S. dollar since May 21, trading at 1.3757 intraday and closing at 1.3790, or 72.52 U.S. cents, on Thursday. This marks a near three-month high for the loonie amid rising oil prices and optimism over a potential U.S.-Canada trade deal, according to livemint.com.
The currency's rise was driven primarily by higher oil prices and a broad-based weakness in the U.S. dollar, which investors linked to concerns about the increasing U.S. government debt. Darren Richardson, chief operating officer at Vantry Capital Inc., noted these factors as key supports for the Canadian dollar. The U.S. Treasury Department reported that total U.S. debt surpassed $40 trillion for the first time on Wednesday.
The Canadian dollar's gains come as bond yields in Canada also rose, reflecting investor confidence tied to the energy sector and trade prospects. Meanwhile, the U.S. dollar showed mixed performance, edging higher against a basket of major currencies despite its weakness against the loonie. This dynamic highlights the influence of commodity prices and fiscal concerns on currency markets, as detailed by livemint.com.
The Canadian dollar's intraday peak at 1.3757 against the U.S. dollar on August 20 represents the highest level since May 21, underscoring the currency's sensitivity to oil price movements and fiscal developments in the U.S.